Federal Government Passes Legislation to Ban Replacement Workers

On June 20, 2024, Bill C-58, An Act to amend the Canada Labour Code and the Canada Industrial Relations Board Regulations, 2012 (Bill C-58) received royal assent. Among other things, Bill C-58 bans the use of replacement workers in federally regulated workplaces, subject to certain exceptions. This legislation will take effect on June 20, 2025.

In our Federal Post of November 13, 2023, we outlined the amendments initially introduced by Bill C-58 that will amend Part I (Industrial Relations) of the Canada Labour Code (Code). Further amendments have been made as this bill moved through the House of Commons and Senate and the key provisions that will impact federally regulated employers are set out below.

Prohibition of Replacement Workers

Bill C-58 will repeal the existing Code provision relating to the limited prohibition of replacement workers and replace it with the following expanded prohibition:

During a legal strike or lockout, employers (or persons acting on their behalf) will be prohibited from using the services of any of the following persons to perform all or part of the duties of a bargaining unit employee who is on strike or locked out:
- any employee or any person who performs management functions or who is employed in a confidential capacity in matters related to industrial relations, if that employee or person is hired after the day on which notice to bargain collectively is given
- any contractor other than a dependent contractor or any employee of another employer
- any employee whose normal workplace is one other than that at which the strike or lockout is occurring or who was transferred to that workplace after notice to bargain collectively is given
- any volunteer, student or member of the public

During a strike or lockout, employers will be prohibited from using any employee in the bargaining unit for a purpose other than for maintenance of activities to “the extent necessary to prevent an immediate and serious danger to the safety or health of the public” and for the service of grain vessels.

Employers that were using the services of a contractor whose services were the same as or substantially similar to the duties of an employee in the bargaining unit before the notice to collectively bargain was given may continue to use those services throughout a legal strike or lockout. The contractor’s services, however, must be done in the same manner, to the same extent and in the same circumstances as before the notice was given.

Notwithstanding the prohibitions described above, employers will continue to have the right to deploy their existing workforce (i.e., those hired prior to the notice to bargain and who are not in the bargaining unit) to perform activities that were previously performed by members of the striking or locked out bargaining unit, provided that their existing workforce was working at the workplace where the strike or lockout is occurring prior to notice of bargain being given.

Bill C-58 will permit employers to use replacement workers to perform bargaining unit work where the services are used solely to deal with a situation that presents or could reasonably be expected to present an imminent or serious threat:

to the life, health or safety of any person
of destruction of, or serious damage to, the employer’s property or premises
of serious environmental damage affecting the employer’s property or premises

The use of these services must be necessary in order to deal with the situation because the employer or person acting on behalf of the employer is unable to do so by any other means. Further, the work must first be offered to employees in the bargaining unit who are on strike or locked out.

Penalties for Illegal Use of Replacement Workers

Under Bill C-58, the illegal use of replacement workers during a strike or lockout will constitute an unfair labour practice. If the Canadian Industrial Relations Board (CIRB) concludes that a contravention has taken place, it could order the employer to cease the use of the replacement workers and fine employers a fine not exceeding $100,000 for each day during which the offence is committed or continued.

Bill C-58 also provides a regulatory-making authority for establishing an administrative monetary penalty scheme for the purpose of compliance with the ban on replacement workers.

Maintenance of Activities Provision

Bill C-58 will amend the Code’s maintenance of activities provisions such that the employer and union must, no later than 15 days after the day on which the notice to bargain collectively has been given, enter into an agreement identifying the supply of services, operation of facilities or production of goods which must continue to prevent an immediate and serious danger to the safety or health of the public.

If the parties conclude that it is not necessary to “continue any supply of services, operation of facilities or production of goods in order,” this conclusion must be set out in the agreement. The agreement must be filed with the Minister of Labour and the CIRB. If no agreement is reached, the parties will be required to apply to the CIRB to determine which activities must be maintained. Among other things, the CIRB must resolve these issues within 90 days. Employers and unions will be required to have a maintenance of activities agreement in place before they can issue 72 hours’ notice for a strike or lockout.

CIRB

Bill C-58 will expand the powers of the CIRB “to make any order and give any direction that the Board considers appropriate for the purpose of expediting proceedings or preventing an abuse of process.”

Bill C-58 will also make consequential amendments to the Canada Industrial Relations Board Regulations, 2012.

Conclusion

Bill C-58 will impact the dynamic of a strike or lockout in the federal sector. Employers that fail to comply with the new restrictions may be subject to significant penalties. Federal workplaces should begin to plan now for how they may address this when the legislation ultimately comes into force on June 20, 2025.

If you have questions about the changes introduced by Bill C-58, please reach out to your regular Hicks Morley lawyer.

The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©

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